Taxman’s £23m bonus for failure

Senior tax officials are being ‘rewarded for failure’ as they are handed record bonuses totalling more than £23million this year.

The payouts – up nearly a quarter from last year – are being made to HM Revenue and Customs staff despite the department continuing to lose £1billion to fraud and error.

They also come just three months after the department admitted it had lost computer discs containing the details of 25million people.

Conservative MP Michael Fallon attacked the payments as ‘rewards for failure’, while the TaxPayers’ Alliance said they were ‘beyond belief’.

The performance-related payouts, disclosed yesterday after a Freedom of Information Act request, are expected to be to £23.1million over the financial year – up 22 per cent from £18.9million in 2006/7.

They have doubled since the previous year, when the figure was £11million.

It is thought nearly 40,000 staff could receive bonuses but the biggest rewards will go to the most senior managers.

Last year, 220 staff shared £1.7million, or £7,727 each. This year, the most senior staff have been allocated £2.2million, up nearly a third.

Mr Fallon, chairman of the Commons Treasury Sub-committee, said: ‘This appears to be rewarding failure. I would have expected bonuses to be cut back even further until the organisation was made more efficient.’

Just days ago, Chancellor Alistair Darling warned City firms to stop dishing out large bonuses if they could not be justified to the public.

Matthew Elliott, of the TaxPayers’ Alliance, said: ‘HMRC let down taxpayers – they should be looking at disciplinary measures, not bonuses.’

HMRC said the payments were based on performances during 2006/7 and those for the current financial year had not yet been set.